Phuket

joe418 · #1 16-01-2005, 21:53

A freind of mine owns a bar in phuket,and has given me the opportunity to own half the bar.

What do i need to do from a legal point from the uk,he is taking care of things in thailand.

Thanks in advance,

joe.

eric-the-viking · #2 16-01-2005, 22:02

Quote:

Originally Posted by joe418

A freind of mine owns a bar in phuket,and has given me the opportunity to own half the bar.

What do i need to do from a legal point from the uk,he is taking care of things in thailand.

Thanks in advance,

joe.

no matter how good a mate , first thing i would do if i had the chance was look at the books and then find a good lawyer.
no help to you i know ,but that would be my first step

jimholio · #3 16-01-2005, 22:07

Agree with eric, not that i have any kind of experience of this but it seems the right thing to do, specially now, when there are so few tourists.

joe418 · #4 16-01-2005, 22:53

I'm looking at the books when i go back in a few weeks,i was just wondering if i personally had to do anything in the uk regarding permits etc.

Joe.

LivinLOS · #5 17-01-2005, 01:21

Books mean nearly nothing in Thailand.. I dont know of a single bar that genuinely declares its income or profit.. Its either nothing to pay no tax or loads to sell the place..

You can get a 1 year non imm 0 (4 visa runs every 90 days) from hull.. They should not give them but they do...

As to the bar.. Unless you want to confess how much you are planning paying and where it is (both very private issues) its impossible to say if you are getting a deal or a lemon.. The only thing I would say is that the bar scene is a crowded market and it can make enough to get by (sometimes) but it very rarely gets anyone rich..

joe418 · #6 17-01-2005, 17:19

I thought that may be the case with the books,could you tell me what i have to do from a legal point of view from the uk (work permits visas aside) please.

Many thanks.

joe

LivinLOS · #7 17-01-2005, 18:11

Not sure what you mean.. Once visa's and (rarely) WP's are done.. You take some shares in the company (pay attention to voting shares and non voting shares.. Not all shares are equal) what else are you worrying about ??

The place would need a liquor licence but must already have one in place ??

joe418 · #8 17-01-2005, 18:54

Its all very new to me,i've known my potential business partner for a while,i just needed to know if there's anything i have to do from a legal point of view from the uk apart from getting a work permit etc.

joe

gregor200 · #9 17-01-2005, 19:11

I think, it is just like TimeShare. When you arrive at your bar, you get a free seat and free drink and (maybe) free girls. Therefore, put in your money, if you don´t need it and that all return on investment will be in naturals.

joe418 · #10 17-01-2005, 19:21

What are the bm's opinions on the value of bars since 26/12,would you say if they were to be valued now,would they be the same as before,or less.

The bar in question has had no damage to it whatsoever.

Thanks again,

Joe.

Mac · #11 17-01-2005, 19:53

Hi Joe
Forgive me on this because I can slightly hear my old Grandma sucking eggs in the background, but buying a share in the business and working for the business are different things.

If you are going to buy a share in the business then there are a number of steps to take:

1. Determine what you are exactly buying.
If the Bar is a business then it will have paid up share capital. This will usually be divided up into shares of one kind or another. Voting shares and non voting shares, sometimes called preference shares. It would be prudent to seek a percentage of the voting shares.

2. Determine the value, captial and future income.
In my view it does not really matter much what the bar is worth now, it is only whether you will receive an adequate return on your investment and whether have some hope of receiving your investment back by the sale of your shares.

3. Tax Law
As you are a UK citizen any income accruing to you in Thailand will be taxed in the UK. There is no double taxation treaty in Thailand so tax on the business will be paid in Thailand as well. Currently income on Dividends is taxed at 10% for the first £29,500 and 32.5% after that. If you earn £29,500 after allowances already then all of your dividend income will be taxed at 32.5%. If you do not declare your foreign earnings and this is discovered then you will be fined heavily and possibly put in prison.

4. Is this a sound business venture.
Given the propensity of Bar Owners to cook the books a bit I would not consider this to be a sound business venture on a financial basis. It is not possible to pay a share dividend on unearned profits if you see what I mean, so it is unlikely that you will receive a realistic dividend return on your investment. It is also probably difficult to sell your "share" in the business at a future date because the potential buyer will be negotiating with your mate and not you.

To this end you have to consider what your motives really are. If you just want to help out your mate then perhaps you might consider a deal structure in which you purchase a nominal share in the business, get appointed as a director and then charge him "rent". The tax on this "rental" will be 40% top rate in the UK but you are allowed to offset "expenses" against the rental income - although you need to check with your tax lawyer what legitimate expenses are and the optimal structure for this deal. I would imagine that you are allowed a couple of trips a year to check up on things.

5. Liabilities
What I would consider is the potential downside of the business venture. Quite apart from the consequences of a financial loss, if you are a Director of the company and someone sues the business because they get Aids or some other horrible event occurs you will be liable. At the very least you will be in court in Thailand.

IMHO I would talk carefully with your friend and try to work out what the best option is for you - then get a good Lawyer.

Mac

joe418 · #12 17-01-2005, 20:35

Alot to take in,some i knew already,some i didn't.The bottom line is my mate has offered me the chance to own half the bar in question.He probably wants me to live in thailand for 8 months max a year.To me its a chance to live in los,make enough money to get by and run a bar which i've wanted to do for a while.I realise that i'm never goin' to make huge amounts,but as long as in can cover my overheads and get by i'll be happy.

Joe.